New Zealand bonds close higher as geopolitical tension stays on; eyes on Q2 producer price index

The New Zealand bonds closed higher Tuesday as geopolitical tensions lingered, although Asian markets are expected not to be affected heavily by the ongoing political crisis in Turkey. Investors will now remain focussed on the country’s producer price index (PPI) data for the second quarter of this year, scheduled to be released on August 16 by 22:45GMT for further direction in the debt market.

At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, remained tad lower at 2.60 percent, the yield on the long-term 20-year note fell 1-1/2 basis points to 2.91 percent and the yield on short-term 1-year closed 1/2 basis point lower at 1.76 percent.

Wall Street closed lower as oil prices slid, while the USD rose and the 10-year UST bond yield edged slightly higher to 2.88 percent ahead of impending supply. Further, the CBO pared its US growth forecast from 3.3 percent to 3.1 percent for 2018, citing the trade spat, but kept its 2019 forecast unchanged at 2.4 percent. Asian markets are likely to trade with a nervous tone today amid the ongoing Turkish jitters, OCBC Treasury Research reported.

Meanwhile, the NZX 50 index closed 0.30 percent lower at 8,971.94, while at 06:00GMT, the FxWirePro's Hourly NZD Strength Index remained slightly bearish at -125.17 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex